//
[2021] FWC 886
General information, not legal advice.
Fair Work Commission
2021-03-04
Original judgment source is linked above.
The attached document replaces the document previously issued with the above code on Thursday 4 March 2021.
[2021] FWC 886 [Note: An appeal pursuant to s.604 (C2021/1353) was lodged against this decision.]
s.394 - Unfair dismissal
[1] On 26 September 2020 Mr Brendan Hempel made an application to the Commission pursuant to s.394 of the Fair Work Act 2009 (FW Act) claiming he had been unfairly dismissed from his employment with Northern Territory Air Services Pty Ltd (NTAS). Mr Hempel commenced employment with NTAS on 26 January 2020 and his employment was terminated with effect from 15 September 2020. In filing its response to the application NTAS objected to the application on the grounds that it said it was a small business (employing fewer than 15 employees) and that, for this reason, Mr Hempel had not worked the minimum employment period of 12 months necessary to make an application to the Commission.
[2] The file was allocated to the Norther Territory list and was subject to a number of conferences before a Commission Member in an effort to resolve orders for production of documents sought by Mr Hempel. Ultimately that Member determined she should no longer deal with the application having expressed some views to the parties in relation to the merits of the case. The file was subsequently allocated to me, the parties and their representatives being primarily located in Melbourne although the work was performed in the Northern Territory.
[3] I issued directions to the parties to file submissions and evidence in relation to the small business/minimum employment period jurisdictional objection on 8 December 2020. I also issued orders for the production of documents in relation to work performed by a number of individuals for NTAS on application by Mr Hempel. Prior to hearing I also issued orders to attend to Mr Mark Robertson and Mr Andrew Lang, both of whom were said to be contractors by NTAS but claimed to be employees by Mr Hempel.
[4] Beyond this, and outside the direction and orders issued by the Commission, there was substantial correspondence between the parties to which the Commission was copied. The purpose of this correspondence and its benefit to the matters to be determined remain opaque. To the extent such material was not sought to be formally introduced at hearing I have not had regard to it.
[5] Both parties were represented with the permission of the Commission.
[6] Section 382 of the FW Act sets out when an employee is protected from unfair dismissal:
382 When a person is protected from unfair dismissal
A person is protected from unfair dismissal at a time if, at that time:
(a) the person is an employee who has completed a period of employment with his or her employer of at least the minimum employment period; and
(ii) an enterprise agreement applies to the person in relation to the employment;
(iii) the sum of the person's annual rate of earnings, and such other amounts (if any) worked out in relation to the person in accordance with the regulations, is less than the high income threshold.
[7] The minimum employment period, if the employer is not a small business, is 6 months (s.383(a)) and one year if the employer is a small business (s.383(b)).
[8] A small business employer is defined in s.23 of the FW Act:
(1) A national system employer is a small business employer at a particular time if the employer employs fewer than 15 employees at that time.
(2) For the purpose of calculating the number of employees employed by the employer at a particular time:
(a) subject to paragraph (b), all employees employed by the employer at that time are to be counted; and
(b) a casual employee is not to be counted unless, at that time, he or she has been employed by the employer on a regular and systematic basis.
(3) For the purpose of calculating the number of employees employed by the employer at a particular time, associated entities are taken to be one entity.
[9] An associated entity, as used in the definition of small business employer, is defined in the Corporations Act 2001. Given the matters required to be considered in this decision the relevant provisions of the Corporations Act are set out below:
A body corporate (in this section called the first body) is a subsidiary of another body corporate if, and only if:
(i) controls the composition of the first body's board; or
(ii) is in a position to cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the first body; or
(iii) holds more than one-half of the issued share capital of the first body (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); or
(b) the first body is a subsidiary of a subsidiary of the other body.
(a) a holding company of another body corporate; or
(c) a subsidiary of a holding company of another body corporate;
the first-mentioned body and the other body are related to each other.
(1) One entity (the associate) is an associated entity of another entity (the principal) if subsection (2), (3), (4), (5), (6) or (7) is satisfied.
(2) This subsection is satisfied if the associate and the principal are related bodies corporate.
(3) This subsection is satisfied if the principal controls the associate.
(b) the operations, resources or affairs of the principal are material to the associate.
(a) the associate has a qualifying investment (see subsection (8)) in the principal; and
(b) the associate has significant influence over the principal; and
(a) the principal has a qualifying investment (see subsection (8)) in the associate; and
(b) the principal has significant influence over the associate; and
(a) an entity (the third entity) controls both the principal and the associate; and
(b) the operations, resources or affairs of the principal and the associate are both material to the third entity.
(8) For the purposes of this section, one entity (the first entity) has a qualifying investment in another entity (the second entity) if the first entity:
(a) has an asset that is an investment in the second entity; or
(b) has an asset that is the beneficial interest in an investment in the second entity and has control over that asset.
(1) For the purposes of this Act, an entity controls a second entity if the first entity has the capacity to determine the outcome of decisions about the second entity's financial and operating policies.
(2) In determining whether the first entity has this capacity:
(a) the practical influence the first entity can exert (rather than the rights it can enforce) is the issue to be considered; and
(b) any practice or pattern of behaviour affecting the second entity's financial or operating policies is to be taken into account (even if it involves a breach of an agreement or a breach of trust).
(3) The first entity does not control the second entity merely because the first entity and a third entity jointly have the capacity to determine the outcome of decisions about the second entity's financial and operating policies.
(a) has the capacity to influence decisions about the second entity's financial and operating policies; and
(b) is under a legal obligation to exercise that capacity for the benefit of someone other than the first entity's members;
the first entity is taken not to control the second entity.
[10] NTAS is a trading company. Its Director is Mr Ian Scheyer. There are a number of companies which appear, on their face, to be interrelated. Each has essentially the same ownership structure and the same director. Each is relevant for the purpose of determining if the employer of Mr Hempel is a small business.
50% - Ian Scheyer Holdings Pty Ltd ATF Scheyer Family Trust
3 employees at the date Mr Hempel's employment was terminated
50% - Ian Scheyer Holdings Pty Ltd ATF Scheyer Family Trust
Holder of CAR[1]-30 certificate of approval for aircraft maintenance
50% - Ian Scheyer Holdings Pty Ltd ATF Scheyer Family Trust
50% - Ian Scheyer Holdings Pty Ltd ATF Scheyer Family Trust
100% - Ian Scheyer Holdings Pty Ltd ATF Scheyer Family Trust
[11] On consideration of the material presented to me of the various companies and shareholdings, I am satisfied that AAMS and NTAS are associated entities for the purpose of determining the number of employees of the employer. I am satisfied that all of the listed companies are associated entities but, for the purpose of the matter before me, only the employing entities are relevant.
[12] I have reached this conclusion based on the following:
(i) NTAS is a subsidiary of AAMS as AAMS holds more than one-half of the shares in NTAS (it, in fact, owns 100%) - see s.47(a)(iii) of Corporations Act;
(ii) NTAS and AAMS are, therefore, related bodies corporate - see s.50(b) of the Corporations Act; and
(iii) NTAS and AAMS are therefore associated entities - see s.50AAA(2) of the Corporations Act.
[13] This analysis leads to the conclusion that AAMS and NTAS are associated entities as defined in the Corporations Act. They therefore can be jointly considered in determining the number of employees for the purpose of s.23(3) of the FW Act. It is therefore relevant to consider all employees of AAMS and NTAS to determine if NTAS is a small business.
[14] In total, and based on the evidence before the Commission, NTAS and AAMS employed, at the relevant time (that is, at the time of Mr Hempel's dismissal from employment), 14 employees, including Mr Hempel. On this basis Mr Hempel cannot be said to have completed the minimum employment period necessary to make him eligible to make a claim for unfair dismissal.
[15] Mr Hempel, however, disputes the status of two contractors who perform work for the associated entities. It is therefore necessary to consider if the individuals concerned are employees or contractors prior to determining if Mr Hempel has completed the minimum employment period necessary such that he may make an application for relief from unfair dismissal.
[16] Mr Hempel submits that there are two people performing work for the related bodies who - while called contractors - are in fact employees. If this is so, even for one of these individuals, NTAS is not a small business as defined in the FW Act and Mr Hempel will be eligible to make an application for unfair dismissal.
[17] The two individuals concerned are Mr Mark Robertson who is a pilot and flies for NTAS and Mr Andrew Lang who performs maintenance for Alice Aircraft and Maintenance Services (AAMS).
[18] Documents in relation to hours worked and invoices issued by each of these individuals were produced by NTAS on order of the Commission.
[19] Mr Robertson and Mr Lang were also both ordered to attend and give evidence at the hearing of the jurisdictional objection. Mr Robertson attended pursuant to that Order, Mr Lang did not.
[20] Mr Hempel submits that a "preliminary matter" in determining if a person is a contractor in relation to particular work involves answering "two practical questions," namely:
(a) is the person performing work as an entrepreneur who owns and operates a business; and
(b) in performing the work, is the person working in and for that person's own business as a representative of that business and not of the business receiving the work.[2]
[21] Mr Hempel says that if the answer to both questions is yes the person is likely to be an independent contractor and if no, the person is likely to be an employee.
[22] In Abdalla v Viewdaze Pty Ltd t/a Malta Travel[3] (Abdalla) the Full Bench of the Australian Industrial Relation Commission said, at [34]:
Whether a worker is an employee or an independent contractor turns on whether the relationship to which the contract between the worker and the putative employer gives rise is a relationship where the contract between the parties is to be characterised as a contract of service or a contract for the provision of services. The ultimate question will always be whether the worker is the servant of another in that other's business, or whether the worker carries on a trade or business of his or her own behalf[4]: that is, whether, viewed as a practical matter, the putative worker could be said to be conducting a business of his or her own[5]. This question is answered by considering the totality of the relationship[6].
[23] Whilst the consideration of whether Mr Robertson or Mr Lang were servants in the business or were carrying out a trade or business of their own is important, is not the only factor to be considered. The answer to this question lies in a consideration of all of the relevant indicia.
[24] In Stevens v Brodribb Sawmilling Co Pty Ltd_[7]_ the High Court said:
12. Having said that, we should point out that any attempt to list the relevant matters, however incompletely, may mislead because they can be no more than a guide to the existence of the relationship of master and servant. The ultimate question will always be whether a person is acting as the servant of another or on his own behalf and the answer to that question may be indicated in ways which are not always the same and which do not always have the same significance. That is best illustrated by turning to the circumstances of this case and in particular to those circumstances which were suggested as indicating that Gray was the servant of Brodribb.
IS MR ROBERTSON AN EMPLOYEE OR CONTRACTOR OF NTAS?
[25] Mr Robertson and Mr Ian Scheyer gave evidence as to the engagement of Mr Robertson and how the work he undertakes is performed. Mr Hempel gave evidence as to his knowledge of the arrangement with Mr Robertson.
[26] In his evidence Mr Robertson said:
He works for himself as he is self-employed;
He has been a contractor to NTAS since 2 July 2020 and works 2 days per week based on availability;
He also provides contract work to Barclay Aviation;
He works according to his availability and has rejected work offered by NTAS when he has wanted to go away. When he did go away he did not apply for leave, he just didn't go to work;
He does not delegate the work as he would then not get paid for it and he cannot afford to not be paid;
• He became engaged by NTAS by applying for a job that was advertised. At the time he had a full time job but was looking for extra work. He does not remember the details of the job he applied for as he drinks too many beers and doesn't remember much.[8] When he applied for the position he had a conversation with Ian Scheyer on the phone where he was offered casual work but he preferred contracting so that was the arrangement reached;
• As a contractor he pays his own taxes and superannuation and does not get access to paid leave. He provides invoices to NTAS.[9] He provides all his own paperwork folders, headset, license, etc - everything except the aircraft and fuel card;
• The rosters[10] indicate the work offered to him but the actual hours worked varies depending on the job itself and he does not know how many hours he will work on a particular day until he arrives at work;
[27] Mr Scheyer is the sole Director and 50% shareholder of NTAS. He is a qualified pilot with 42 years' experience in the industry.
[28] Mr Scheyer said that the AOC under which NTAS flies is owned by AV Charter.
[29] Mr Scheyer gave evidence of the relationship between NTAS and Mr Robertson:
Mr Robertson was offered a contract because he was a contractor and in the process of changing the basis of his engagement with Barclay Aviation to that of a contractor;
NTAS (and Mr Scheyer) do not control when Mr Robertson works;
Mr Hempel was engaged as an employee of NTAS when he was employed in January 2020 as NTAS was looking for someone at that time to train as the Chief Pilot and the Civil Aviation Safety Authority (CASA) requires that to be an appointed position. Further, COVID-19 had not had an impact on the business at the time of Mr Hempel's employment and NTAS could afford to employ him;
He did not instruct Mr Hempel "at the last minute" to engage Mr Robertson as a contractor;
Every Thursday and Friday are offered to Mr Robertson for work but he is not always available to do it;
He described Mr Robertson's engagement as ad hoc because Mr Robertson choses when he is available;
Mr Robertson would advise his non-availability to "Operations" and the Chief Pilot;
The use of the term "leave" in the scheduler just means that the "asset" is not available;
Mr Robertson is not able to delegate his duties to anyone else;
He is not aware if Mr Robertson advertise his services;
There are no ownership markings on the aircraft operated by NTAS or flown by Mr Robertson;
NTAS can suspend - in the sense that it would not hire - Mr Robertson if he does not comply with (business or regulatory) requirements.
[30] Mr Hempel said that he was responsible for placing the job advertisement for the position ultimately occupied by Mr Robertson. He said the role was based at Mt Isa and "consisted of RPT [sic] flights, whereby the flights were available to the public and had to be conducted at the same time every week." Mr Hempel conducted interviews for the position and reported to Mr Scheyer and the Chief Pilot. He understood that Mr Robertson was employed to work a set number of days per week. He said this was the case until he was advised "at the last minute" to categorise Mr Robertson as a contractor.
[31] Mr Hempel said that from 10 July 2020 until 11 September 2020 (when Mr Hempel's employment was terminated) Mr Robertson worked the same shifts every Thursday and Friday, working 8 hours on a Thursday and 5 hours on a Friday and was paid $350 per day.[11]
[32] Mr Hempel said Mr Robertson flies the same routes each week and they are "designated mail transportations flights"; NTAS has control over Mr Robertson's flights; Mr Robertson is under the supervision of the Chief Pilot; Mr Robertson does not have his own AOC; NTAS provides Mr Robertson with "everything necessary to do his work" including pilot data on airstrips, schedules, radio frequencies and maps and Mr Robertson is required to file his flights and duty times as is every other pilot of NTAS.
[33] In submissions Ms Carter, for NTAS, said that Mr Robertson was not providing a flying service to NTAS but rather his services as a pilot. NTAS used those services to operate an aircraft. Mr Robertson had the capacity to make his services as a pilot available or not for work of NTAS. Ms Carter also said it would be wrong to confuse the operation of the scheduling system, which may show a person listed on the scheduled as "on leave," as being indicative that Mr Robertson took leave from - as opposed to being unavailable to - NTAS.
[34] Mr O'Halloran for Mr Hempel said a consideration of the various indicia and the relevant authorities support a conclusion that Mr Robertson was an employee of NTAS and not a contractor. Mr O'Halloran said that Mr Scheyer's attempts to justify Mr Robertson as a contractor were "unconvincing" and should be rejected.
[35] Mr O'Halloran also submitted that Mr Robertson does not hold an AOC. By virtue of the decision in Bobridge v Choppair Helicopters Pty Ltd and Anor[12] he therefore cannot operate his own business[13] (in this particular industry). For that reason Mr Robertson must be an employee, and not a contractor, of NTAS.
[36] Both Mr Robertson and Mr Scheyer agree that Mr Robertson is a contractor and not an employee. However, how Mr Robertson and NTAS may define their relationship, the label they may give to it and how Mr Robertson may have arranged his affairs (an ABN, payment of his own taxation etc) cannot define whether he is a contractor or employee.[14] What is necessary is a consideration of the relationship against the relevant indicia with a determination made taking each of the relevant factors into account.
[37] I have considered the evidence in accordance with the various indicia outlined in a range of decisions of the Courts and the Commission.[15] In particular I have followed the formulation in Abdalla.[16]
Whether Mr Robertson conducted his own business or was a servant of NTAS
[38] Mr Robertson agrees that he is a sole trader - he does not claim to operate an incorporated business. He does not hold, as a sole trader, an AOC.
[39] Mr Hempel places substantial weight on this matter and, in particular, that Mr Robertson does not run an incorporated business, but is rather a sole trader, and that he does not provide his own aeroplane. In this respect I consider that Mr Hempel confuses form over substance. Mr Robertson does not suggest that he provides aircraft as part of the services he offers. Rather, he says that he provides his skills and services as a pilot.
[40] The evidence and submissions of both parties in relation to the relevance of who holds the AOC is lacking. Mr Hempel relies only on the decision in Choppair to support his argument and NTAS asserts that Mr Hempel is wrong and that a pilot can fly on another company's AOC. The material before me went no further than that and was of little assistance in considering this matter. Neither party took me to the Civil Aviation Safety Authority **(**CASA) or legislative requirements in relation to an AOC which, perhaps, may have shed some light on the question.
[41] In the decision in Choppair Judge Burchardt concluded that Ms Bobridge must have been an employee because, "as a matter of law", an independent person could not run their own business if they did not hold an AOC. His Honour said:
348. In the ultimate, to my mind, the decisive consideration in this case is the requirement that a helicopter operator must have an AOC. Air Melbourne could not operate the helicopters itself because it did not have an AOC and had to delegate the actual operation of the helicopters to Choppair.
349. As a matter of analysis, it seems to me that although it is clear that a number of pilots fly as what is described as independent contractors, and it is clear that Ms Bobridge described herself as one on at least one occasion to Mr Watson, this is not the correct characterisation of this relationship at law. An independent employee such as Ms Bobridge simply cannot operate her own independent business. She does not have an AOC. In those circumstances, there is nothing in any of the materials asserted before the court that suggests that the parent company Choppair has the capacity to, as it were, engage independent contractors who do not have an AOC independently to fly its aircraft. It follows that Ms Bobridge must have been, at law, an employee of Choppair on the date of the accident and in the other post 25 October 2013 flights.
[42] In that case Ms Bobridge did not have an AOC and therefore could not be a helicopter operator. It was therefore determined that she was an employee of Choppair. I have carefully considered the decision in Choppair. With all due respect to the conclusion reached therein, there is no analysis, based on the relevant legislative requirements, that supports or details how the conclusion was reached that she could not be a contractor without an AOC such that I could conclude the decision is relevant to the matter before me. The decision did not say she was not duly licensed as a helicopter pilot nor that she could not fly a helicopter.
[43] In any event, in the matter before me Mr Robertson does not assert that he is an aircraft operator or that he contracts as such. He is a pilot and says that is the service he contracts.
[44] On a brief review of the Civil Aviation Act 1988, the requirement for an AOC appears to relate to aircraft flying or operating in Australia[17] with an aircraft defined[18] in a way that does not suggest it includes a pilot. Nothing supports a conclusion that a pilot, not directly employed, must have an AOC to be able to fly. However, having not had the benefit of detailed submissions on the effects of the Civil Aviation Act and Civil Air Regulations I do not reach any definitive view on that question but, given my conclusion in relation to Choppair, do not consider this fatal to a consideration of the status of Mr Robertson.
[45] Absent any analysis, or at least a passing reference by the parties before me, as to the relevant legislation I am not satisfied that Mr Robertson cannot be a contractor just because he does not, or a company he owns does not, have an AOC. I would observe that in this case Mr Robertson pilots an aircraft which is operated under the AOC held by AV Charter.
[46] Given my conclusion as to the applicability of the decision in Choppair, the absence of the AOC does not lend itself to a conclusion that Mr Robertson must be an employee.
The nature of the work performed and the manner in which it is performed must always be considered
[47] Mr Robertson is a pilot. He does not run or operate his own aircraft or flying business. The service he offers to NTAS (and Barclay Aviation) is as a pilot flying aircraft owned and operated by those he contracts to. That is, he provides his skills, not physical equipment to the job at hand.
[48] There is no written contract between Mr Robertson and NTAS put before the Commission. Rather, the agreement appears to have been signed on a "handshake" following an interview of Mr Robertson by Mr Scheyer and the Chief Pilot. Mr Scheyer offered Mr Robertson work on a casual or part time basis (it was not abundantly clear from the evidence and not apparent Mr Robertson understood any distinction) or, alternatively, as a contractor.
[49] I would observe that, just because Mr Robertson chose to be a contractor over a casual employee does not support a conclusion that he was a contractor.
Whether the putative employer exercises, or has the right to exercise, control over the manner in which work is performed, place of work, hours of work and the like
[50] To the extent that NTAS has particular flights that need to be undertaken it certainly controls the hours of work available to Mr Robertson. NTAS offers specific slots in its schedule to Mr Robertson based on the hours he is prepared to work. Whether he actually works on those days, the evidence supports, is a matter for him.
[51] I am satisfied that Mr Robertson has no control over when the work is to be done - the Thursday and Friday scheduled work must be done on Thursday and Friday. However, it should be noted that NTAS holds the contract with the Department of Infrastructure to provide services to remote communities[19] and, in this respect, it too is required to deliver those services on the scheduled basis.
[52] I do not consider this weighs in favour of finding Mr Robertson is a contractor or employee. A lack of control over when the work is to be performed would appear to be a reflection of the contract held by NTAS. As was said in Brodribb:
[B]ut in some circumstances it may even be a mistake to treat as decisive a reservation of control over the manner in which work is performed for another. That was made clear in Queensland Stations Pty. Ltd v Federal Commissioner of Taxation, a case involving a droving contract in which Dixon J observed that the reservation of a right to direct or superintend the performance of the task cannot transform into a contract of service what in essence is an independent contract.[20]
Whether the worker performs work for others (or has a genuine and practical entitlement to do so)
[53] I am satisfied that Mr Robertson has the right to and does perform work for others. Mr Robertson said he performs work for Barclay Aviation but not the third air services operator in Mt Isa where he lives.
Whether the worker has a separate place of work and or advertises his or her services to the world at large.
[54] Mr Robertson does not have a separate place of work. Given he does not operate aircraft himself this is, perhaps, not unusual.
[55] Mr Robertson agreed that he does not advertise his services but rather relies on word of mouth. In a small market with apparently 3 operators this is, perhaps, not surprising.
[56] This is a neutral consideration.
Whether the worker provides and maintains significant tools or equipment.
[57] Mr Robertson provides many of the necessary tools to carry out his work. I accept however that radio frequencies, pilot data, aircraft and fuel are provided by NTAS.
Whether the work can be delegated or subcontracted
[58] Mr Robertson does not delegate or subcontract the work he performs for NTAS. Rather, he said that if he cannot or does not want to work he advises NTAS which finds someone else to fly the aircraft that day or days. For example Mr Robertson was not available around Christmas 2020 as he was holidaying with his partner. He advised NTAS of his unavailability and left it to NTAS to determine how the work would be done. Mr Robertson however did indicate that if he was available to work he would not delegate the work as he needed the income. Clearly Mr Robertson does not employ anyone else.
[59] Mr Scheyer said Mr Robertson cannot delegate the work to anyone else.
[60] In many circumstances the inability to delegate would weigh against a finding that a person was a contractor. In this case, given the work performed and when it is required to be performed, I consider this a neutral consideration.
Whether the putative employer has the right to suspend or dismiss the person engaged.
[61] I accept that NTAS could suspend Mr Robertson but only in the sense of not providing work to him. It does not have the right to dismiss him from employment as an employer might do and any decision to cease to offer work to him would not affect the work he performs for others.
[62] This weighs in favour of a finding that he is a contractor.
Whether the putative employer presents the worker to the world at large as an emanation of the business
[63] Mr Robertson does not have his name of the aeroplane he flies. This, in my view, is to continue to misrepresent the services Mr Robertson provides. He does not provide an aircraft service that can be contracted for work. He provides his services as a pilot. There was no evidence that Mr Robertson wears a uniform or has any insignia on his clothing (or aeroplane) that suggest he is an emanation of NTAS.
Whether the worker is remunerated by periodic wage or salary or by reference to completion of tasks
[64] Mr Robertson charges a daily rate for his services based on the maximum flying hours allowed by CASA.
[65] The invoices Mr Robertson provide to NTAS for his services show that Mr Robertson does invoice for the same rate each day he works. That rate ($350 per day) is charged regardless of the hours Mr Robertson is available to work or does work.
[66] As is apparent from the evidence Mr Robertson is scheduled to work 8 hours on Thursdays and 5 hours on Fridays and works those days when he is available to do so (which is most Thursdays and Fridays although there are apparently dates in July, September, October and December when Mr Robertson was not available to NTAS). Mr Robertson said that the actual hours he works may vary (presumably depending on weather, the number of stops he is required to make and so on) but he charges a daily rate for his services, regardless of the number of hours he works on a particular day..
[67] There is no evidence of the hours Mr Robertson does actually work.
Whether income tax is deducted from remuneration paid to the worker
[68] NTAS does not deduct income tax from monies paid to Mr Robertson. Mr Robertson pays his own taxation to the Australian Taxation Office.
Whether the worker is provided with paid holidays or sick leave.
[69] I am satisfied that Mr Robertson is not provided with paid holidays or sick leave. That the electronic scheduler shows him to be "on leave" when he is not available to provide services is not evidence that he is provided with leave entitlements.
Whether the work involves a profession, trade or distinct calling on the part of the person engaged
[70] I am satisfied that the work performed by Mr Robertson is a profession. It is certainly not work that could be performed by anyone. I consider it widely accepted that to undertake the work he does requires many hours of training and skill development.
Whether the worker creates goodwill or saleable assets in the course of his or her work
[71] The flights flown by Mr Robertson appear to be work on a contract that NTAS holds. The extent to which Mr Robertson completing his work effectively may create goodwill for himself or anyone else is not a matter subject to any evidence before me.
Whether the worker spends a significant portion of his remuneration on business expenses
[72] I received no evidence on what proportion of his income Mr Robertson spends on business expenses. Mr Hempel's evidence that Mr Robertson does not spend remuneration on aircraft maintenance or fuel is not determinative of this issue.
[73] I accept that Mr Robertson is content in providing his services to NTAS as a contractor. Further, I accept that he also provides his services to Barclay Aviation and that he may do so to the third air services provider in Mt Isa.
[74] I do not consider the taxation arrangements, superannuation or leave arrangements to be determinative of the matter I need to decide. They are, in my view, "reflections of a view...that the relationship is, or is not, one of employment."[21]
[75] I have carefully considered the relationship between Mr Robertson and NTAS as described by Mr Robertson and Mr Scheyer. This is not a case where the parties to the relationship are at odds as to what their relationship is. For this reason I consider that some weight should be given to how the parties say they are joined. Neither claims employment and both agree it is a contractor relationship.
[76] In Gupta v Portier Pacific Pty Ltd the Full Bench of the Commission said:
[39] However all the above provisions may be regarded as merely labelling or characterising the nature of the contractual relationship between Ms Gupta and Portier Pacific/Uber; none of them set out the substantive rights and obligations of that relationship. It is well established that such labels cannot alter the substantive nature of the relationship. As was stated by Isaacs J in Curtis v Perth & Fremantle Bottle Exchange Co Ltd:[22]
"Where parties enter into a bargain with one another whereby certain rights and obligations are created, they cannot by a mere consensual label alter the inherent character of the relations they have actually called into existence. Many cases have arisen where Courts have disregarded such labels, because in law they were wrong, and have looked beneath them to the real substance."
[40] More recent decisions of the Federal Court Full Court have elucidated this principle in the context of the identification of whether an employment relationship exists. In ACE Insurance Limited v Trifunovski, Buchanan J (with whom Lander and Robertson JJ agreed) said that "the nature of the relationship may be legitimately examined by reference to the actual way in which work was carried out".[23] In Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd, North and Bromberg JJ (with whom Barker J relevantly agreed) said that: "...appellate courts in Australia and the United Kingdom have been particularly alert, when determining whether a relationship is one of employment, to ensure that form and presentation do not distract the court from identifying the substance of what has been truly agreed. It has been repeatedly emphasised that courts should focus on the real substance, practical reality or true nature of the relationship in question...".[24] And in WorkPac Pty Ltd v Skene the Full Court said "The conduct of the parties to the employment relationship and the real substance, practical reality and true nature of that relationship will need to be assessed.[25]
[77] I am satisfied in this case that what has truly been agreed is a contractor relationship between NTAS and Mr Robertson and that the arrangement of the work does support a conclusion to this effect. I do not consider the regularity of the work performed - or the requirement as to when it is performed - to distract from this. I do not consider the absence of an AOC to affect my finding because of what it is that Mr Robertson contracts. There is nothing else in the indicia outlined above that outweighs my finding.
[78] I appreciate that it is a third party (Mr Hempel) who seeks to have me determine the relationship to be that of an employer and employee. Mr Hempel has his reason for doing so which is that he might pursue his application for relief from unfair dismissal, but this is not grounds for me to overturn the established relationship. It seems to me it will often be difficult for a third party to prove a particular relationship against the will of the parties to that relationship.
[79] I accept that Mr Robertson is a sole trader and does not operate an incorporated business. However, I am not convinced that this is determinative of the questions of whether he can be a contractor. Whilst this was relied on by Mr Hempel the basis of this reliance was not made clear.
[80] Whilst I acknowledge the decision in Fair Work Ombudsman v Eagle Tours Pty Ltd[26] I do not consider it analogous to the matter before me. The factual circumstances in that matter cannot be compared to those before me and for that reason it can be distinguished.
[81] There is nothing in this matter that, objectively viewed, definitively points one way or the other. In such circumstances I have placed weight on the relationship entered into between Mr Robertson and NTAS. I am therefore satisfied that the relationship is of contractor whereby Mr Robertson provides his services as a pilot to NTAS.
[82] Mr Lang performs work for AAMS. Mr Lang was, on application of Mr Hempel, issued with an order to attend the Commission to give evidence at the hearing of 14 January 2021. I am satisfied that this Order was served on Mr Lang and the importance of attending pressed on him by Mr O'Halloran.
[83] Mr Lang failed to attend on 14 January 2021 and, following further correspondence from my chambers, failed to attend the second day of hearing on 5 February 2021. Mr Lang has not shown the respect or basic decency to respond to the correspondence of the Commission and has not complied with the Order that he attend and give evidence.
[84] In submissions for Mr Hempel it was put that "the Commission [should] infer that Mr Lang has chosen not to attend on the basis that had he attended, his evidence would not have assisted the respondent."[27]
[85] Ms Carter said, in her submissions:
[Mr Lang is] a highly qualified individual that works for a number of other companies and apparently, he is one of the only individuals in Alice Springs that holds certain qualifications that allow him to fix twin and single engine aircraft.
Unfortunately, he hasn't appeared here and we're unable to gain more insight as to the technicalities of his work and how he contracts across several different businesses. But it is the respondent's submission that he chooses his availability and he comes to work when he wants and indicates his availability when he's available. Also, provides services for other companies. Unfortunately, we've not been able to clarify that with him, but we can rely on Mr Scheyer's affidavit where there are, I think, two letters attached provided by those contractors.[28]
[86] The affidavit provided by Mr Scheyer does not contain correspondence from Mr Lang that might assist the Commission although it does contain an uncontested letter from the Managing Director of Rowdy Industries in relation to the contract work it carries out for NTAS.
[87] Mr Scheyer did provide evidence that Mr Lang does not do work solely for NTAS. He said, in relation to the hours invoiced to AAMS:
He works for Crabtree Aviation within this hangar and those invoiced hours are taken off the invoice - I don't know what the word for it is, you know we do upsy, downsy. They take it - when I pay that and we deduct it off the invoices to Crabtree Aviation.[29]
[88] Mr Scheyer indicated that Mr Lang spent about 30% of his time working for Crabtree Aviation.
[89] In the circumstances I am not prepared to infer that Mr Lang's has failed to attend because his evidence would not support NTAS's claim to be a small business. Firstly, there is no basis on which I can conclude that Mr Lang would do anything for the benefit or otherwise of NTAS. Secondly, the inference I have been asked to draw suggests that NTAS (or Mr Scheyer) has played some part in the non-attendance of Mr Lang and the evidence before the Commission does not support such a conclusion. Thirdly, it is apparent that Mr Scheyer, through his various companies, has a myriad of arrangements with employees and contractors - the complexity of which appears to be exacerbated by the fact that he operates in remote areas of Australia (the location of operations not being in dispute). This is enough to persuade me that the inference should not be drawn. Further, given the claim by Mr Scheyer that Mr Lang is a contractor it would be unfair to draw an inference that adversely effects NTAS in circumstances where Mr Scheyer claims he has no control over Mr Lang.
[90] I do acknowledge the frustration of Mr Hempel at the non-attendance of Mr Lang. By his actions Mr Lang has demonstrated a wilful disregard for the Commission and its role in resolving workplace disputes. Mr Lang's failure to attend does mean Mr Hempel has been denied the opportunity to prosecute his claim to the fullest. However, to transfer the cost of such disregard to NTAS it seems to me a step too far.
[91] I indicated at the hearing that I would refer Mr Lang to the General Manager, given his failure to comply with an order of the Commission. Mr Lang has blatantly refused to comply with an Order issued by the Commission. He has provided no reason for his actions. It is fortunate this case did not, ultimately turn on his evidence, but he could not have known this. By his failure to attend Mr Lang has denied Mr Hempel an opportunity to further press his case that NTAS is not a small business.
[92] For the reasons given above I am satisfied that Mr Robertson is not an employee of NTAS.
[93] For the reasons given I am not prepared to draw any adverse conclusions of the failure of Mr Lang to attend the Commission pursuant to an Order issued by me. I cannot conclude that he is an employee on AAMS.
[94] For these reasons I am satisfied that the total number of employees of NTAS, including associated entities, was 14, including Mr Hempel, at the time Mr Hempel's employment was terminated.
[95] NTAS is therefore a small business as defined in s.23(3) of the FW Act.
[96] Mr Hempel was employed by NTAS from 26 January 2020 to 15 September 2020 - a period of almost 8 months. As the period of employment served by Mr Hempel is less than 1 year he has not served the minimum employment period specified in s.383 of the FW Act. For this reason Mr Hempel is not protected from unfair dismissal pursuant to s.382 of the FW Act. Mr Hempel's application for unfair dismissal is therefore dismissed. An order[30] to this effect will be issued with this decision.
[97] In reaching my conclusion I would finally note that this decision is not influenced by the closing submissions of Ms Carter for NTAS. Her indication of an intention to appeal my decision if it went against her client (without knowing that decision or reasons) and her attempts to smear Mr O'Halloran's character were unnecessary and unprofessional.
[2] See On Call Interpreters and Translators Agency Pty Ltd v Australian Taxation Office (No 3) [2011] FCA 366
[4] Marshall v Whittaker's Building Supply Co [1963] HCA 26; (1963) 109 CLR 210 at p. 217 per Windeyer J approved by the majority in Hollis v Vabu [2001] HCA 44; (2001) 207 CLR 21 at p. 39; see also Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1 per Wilson and Dawson JJ at p. 37.
[5] Hollis v Vabu [2001] HCA 44; (2001) 207 CLR 21 at p.p. 41-42 and p. 45.
[7] [1986] HCA 1 per Wilson and Dawson JJ.
[9] Attachment BH3 to the witness statement of Brenden Hempel.
[10] Attachments BH4 and BH5 to the witness statement of Brenden Hempel.
[11] Based on a review by Mr Hempel of invoices produced by NTAS.
[14] See Aster Home Nursing v Peel [2020] FWCFB 6760 at [40] - [44].
[15] Stevens v Brodribb Sawmilling Co Pty Ltd [1986] HCA 1; On-Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366; Abdalla v Viewdaze Pty Ltd T/A Malta Travel PR927971.
[19] Evidence of Mr Jason Barrow, transcript PN269.
[20] Per Wilson and Dawson JJ, cited in Abdalla at [34].
[21] ACE Insurance Limited v Trifunovski [2013] FCAFC3 cited in Aster Home Nursing Service Pty Ltd v Peel [2020] FWCFB 6760 at [44].
[23] [2013] FCAFC 3, 209 FCR 146 at [91].
[24] [2015] FCAFC 37 at [142], Barker J agreeing at [316].
[28] Transcript 5 February 2021 PN135-6.
[29] Transcript 14 January 2021, PN451.
Printed by authority of the Commonwealth Government Printer
Brendon Hempel
Northern Territory Air Services Pty Ltd [2021] FWC 886
(1963) 109 CLR 210
(2001) 207 CLR 21